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Cisco to create 1,700 jobs in Ontario thanks to $220M in provincial grants

The Ontario government’s pledge of up to $220 million to high-tech firm Cisco Canada has translated into 1,700 much-needed new jobs.

In some rare good economic news for a province that has been bleeding manufacturing positions, Premier Kathleen Wynne said Friday it’s “a great example” of government partnering with the private sector.

Cisco Canada president Nitin Kawale says the company will invest up to $4 billion in Ontario over the next decade. (Larry MacDougal / THE CANADIAN PRESS)

“We are building on Ontario’s position as a global leader in research and innovation and creating important tech sector jobs across the province,” said Wynne, noting the grants will be dependent on Cisco creating the research and development jobs.

“Thank you for your vote of confidence,” she told scores of employees at the firm’s Bay St. offices.

Rob Lloyd, Cisco’s California-based president of development and sales, noted many countries, states, and provinces woo him “to have us bring the kind of knowledge-based jobs that we bring to an economy.”

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“They come to us with different ideas — the president of Poland or the governor of North Carolina, they’re visiting us every day,” said Lloyd, a Canadian.

“We look at those investments or opportunities to partner with a very clear filter: do we see a supportive government? Do we see rich capabilities in the university system? Do we see a very competitive tax rate for a company to do business in? Do we see a great business climate and a predictable environment? Do we find loyal employees that like to stay and develop inside a company?” he said.

“We find all of that in Ontario. That’s exactly why we made this decision over all other choices we have every day.”

Cisco Canada president Nitin Kawale said the company would invest up to $4 billion in Ontario over the next decade and plans to make the province one of its global research and development centres.

Kawale said within six years the systems giant would have 3,000 employees in Toronto and Ottawa — up from 1,300 now — and 5,000 by 2023.

“This initiative will . . . ensure that Ontario continues to be a leader in the information and communications technology industry,” he said, flanked by Cisco staffers.

The San Jose, Ca.-based networking equipment giant said it will add jobs at its facilities in the Ottawa region that currently employ 400 along with a “significant number” of new positions in Toronto.

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Karin Scott, a Cisco Canada spokeswoman, said the company will focus its hiring on recent engineering graduates and will add jobs at a new headquarters under construction in downtown Toronto, along with at its research facility in Scarborough. She said hires will be involved in research and development of high end routers used in mobile computing and video technology.

Cisco is already among the top information and technology spenders in Canada, investing $87.6 million in R&D in the country last year as part of a $5.5 billion annual global expenditure.

The company’s share price, however, hit a seven-month low Thursday after it cut its longer-term earnings and revenue growth targets on conservative customer spending plans and stalling growth in its core business of network equipment.

Friday’s announcement comes as Ontario has been shedding jobs in some sectors with the shuttering of Heinz and Kellogg’s factories, among other closures.

Toronto Deputy Mayor Norm Kelly, at Cisco for the event, said it helps the city “reposition itself globally” to attract other similar businesses.

“This is terrific. Well done, premier,” said Kelly.

But NDP MPP Gilles Bisson (Timmins-James Bay) said the Liberals have not addressed “the crisis in manufacturing” outside Toronto.

“This may be good news, but it’s not a lot of good news for the people in London, the people in Windsor, (or) the people in Leamington,” he said.

Progressive Conservative MPP Vic Fedeli denounced the Cisco plan as nothing more than government handout.

“Our party is wisely against corporate welfare,” said Fedeli, adding that spending about $130,000 a job “is no way to create employment in Ontario.”

“Buying jobs is not the way.”

Queen’s Park says it is has responded to the decline of traditional manufacturing with measures to promote Ontario’s information and communications technology sector, which it calls the third-largest in North America behind California and Texas.

The province has established a new venture capital fund to assist IT startups but spending on R&D by businesses in the province continues to lag business spending in the U.S.

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